After 31/2 years a bankrutcy court has finally closed the case of Polaroid. Formerly a Fortune 500 company, the wreck of this once-great firm was picked clean byits management team. The shareholders (of course) got bupkus…but the super-incompetent last president (who dug the grave for the company) walked off with a nice chunk of cash! And people who had worked 30, 40 years…got a check for $47.00 (the government mercifully didn’t add insult toinjury by deducting income tax).
What an indictment of management-you screw up a company, run it into the ground, and get a big reward!
ONLY in America! :smack:
That is fucked up!
Here’s a link to the story.
Jacques Nassar was also CEO of Ford during the Firestone Tire fiasco. He was subsequently booted.
Actually, while there is some truth to that, the fact is that changing technology did far more to destroy Polaroid than management decisions. The market for instant camera/film has essentially imploded with the advent of digital cameras. Even Kodak is close to dying, though they’ve been more flexible with the advent of digital photography than Polaroid ever attempted (remember their “Picture CD’s” back in the mid-90’s?) But still… they’re not doing well.
Bubchek is a famous critic of corporate structure and has many valuable things to say. You might want to check out his (and co-author Jesse Freid) 2004 book Pay without Performance : The Unfulfilled Promise of Executive Compensation if this issue interests you.
The sick thing about Polaroid: this dipshit who was CEO-when it became clear that Polaroid was about to lose the photo-ID business, he was offered the opprtunity to buy a Texas company that had a digitalI D system. The fool could have bought it for $50 million-now that little company OWNS the entire market! The other thing…CEO Mr. Stupidn had a company with 600 patents (related to lectronic imaging) he made no effort-and let the patents go for nothing. Figures…the guy came from Black&Decker-and his expertise was in drills and toasters.He also sold assets at below value. In short, he absolutely screwed the company-and the BOD did nothing to stop him!
And of course, the current Adminsitration has now reformed Bankruptcy… oh, wait, they only "reformed " Chapter 7, so that “the little guy” is now screwed worse than ever, while this sort of crap can still go on… :mad:
You mean those little guys who earn less than their states median incomes, the ones that aren’t affected by the new legislation?
If so, I haven’t the slightest idea what your post means. 
Yes, he means the little guys that will be forced to pay for and go through the credit counseling process though it will avail them nothing. I can find nothing exempting those with no assets from this requirement. Please correct me if I’m wrong.
There is no question that corporate bankruptcy is much gentler on the corporation than personal bankruptcy is on the person.
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You’re not wrong. And there’s nothing wrong with credit counseling. I’m not even sure what that point is supposed to mean (other than the usual “but what about those with medical bills??” issue that always, always gets brought up in these discussions. In those conditions, of course CC won’t avail them anything. Point taken.)
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Good job on stating the obvious. Individuals aren’t legally liable or called at home when their employer is going bankrupt. However, they are called and are liable when they are going bankrupt. Common sense says that when something is happening to someone else, it is LESS painful than when it happens to you.
The bankruptcy reform bill contains an unbelievably powerful change in the ability of bankruptcy judges to extend the period during which management has the exclusive right to propose a reorganization plan. That change, if effective during the Polaroid bankruptcy, would have given the retirees much much more power than they had under the current law.
Not that you’d give a flying fuck about something so inconvenient as a “fact” of course, but for the benefit of any readers who come along that’s the case.
Credit counseling is not simply sitting down and being counselled about how to handle your money better. Payments are still being made (via the agency) to your creditors, payments are made to the agency itself, and after shelling out all that extra money, you are still a Chapter 7 candidate. This part of the change should have in honesty been called the Credit Counselling Agency Relief in Perpetuity Act.
Good job on missing my point. When a corporation declares bankruptcy, it is allowed to stiff its shareholders, it is allowed to sluff off its retirement plan onto the taxpayers, it is allowed to shaft its employees, yet the people who actually caused the bankruptcy are allowed to receive millions of dollars. They aren’t required to pay a price for their fuckups. There would (and should) be many more companies being dismantled and sold off for the benefit of their creditors were corporate and personal bankruptcies handled more similarly.
I’ve not heard anything about this bill affecting corporate bankruptcies. (As you may notice from my recent posts.) Can you point me somewhere to read up on this?
During the bill’s process I’ve been picking up all the changes from Thomas. Unhappily, it generates links which last about 5 minutes. The final version, the one sent to the White House, is called S.256, or you can just search among bills sent to the president for the word “bankruptcy.”
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Shareholders are not promised any return on their investment. This is basic accounting/finance/corporate law 101. They’re the ones who are accepting the risk that the company will not succeed and they know it before they purchase the stock.
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I’m assuming you’re referring to the Pension Benefit Guaranty Corporation, which was put in effect in 1974 to protect the employees of failed companies from losing their pensions. Are you arguing that the government should have no role in this matter, that the pensioners of failed companies should completely lose their pensions? While I used to toy with Libertarianism in my wild youth, I think such a position is way too harsh. To each his own, I guess.
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Management, line-workers, administrative assistants, executives … they’re all employees. If a company fails, it is because the combined efforts of the employees weren’t enough to save it (unless you’re Barings Bank, in which case a single one of your non-executive employees is responsible for bringing down the entire house.) And, in Polaroids case (especially combined with what has happened to Kodak in the same period), this excuse isn’t as valid simply because technology caught up to them and their main products. Not that I want to give the people in the company a complete pass, but we are talking about a company whose main line of products became rapidly obsolete, seemingly overnight.
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In regards to Nasser, he wasn’t the one (if you’re into the “blame the executive while giving a complete and total pass to all non-executive/managerial employees” game) responsible for Polaroids downfall. While I totally agree with the OP’s point that the bankruptcy laws of the country need to be fixed so that nobody profits for driving a company into bankruptcy, in this case Nasser isn’t the one who “caused the bankruptcy.”
For my own professional amusement . . . names, please?
The Polaroid mess is even more grotesque because most of the top management guys who are walking off with multimillion dollar deals are short-timers, having only a couple of years with the company, while the long-timers who worked for the company for decades are getting $47 each. In its closing days, before bankruptcy, Polaroid froze the worker’s accounts, preventing them from selling company stock (although management had enough advance warning to dump theor own). This double standard understandably infuriated an awful lot of folks around here.
What makes it worse is that, even though Polaroid was a falling company even 15 years ago or so, it was by no means a lost cause. It’s not as if they completely ignored difital imaging. They may have downplayed it, but they had loads of patents on it, and were manufacturing their own imaging chips and manufacturing cameras from scratch in-house. They just didn’t go after a large consumer market, but restricted this to high price, high-end users, They had an enormous line of medical imaging cameras and printers that were compatible with X-ray, sonogram, MRI, and Cat scanners. They had an innovative and cutting-edge injection-molded plastics operation with computer-controlled diamond-turning mold construction. They had a world-class R&D center in Cambridge, near MIT. They had the most versatile and comprehensive manufacturing facility for polarizing filters in the world.
And yet they still failed, and let all that go down the drain. It still amazes me. Their final fall was so sharp and so utterly complete.
I don’t know if it is possible to sue the ex-CEO, but it ought to be done. from what i hear 9I know a lot of ex-polaroid people), the guy acted against the best interests of the company. yes, film photography is going out…but as CALMEACHAM said, Polaroid was well-prepared to get into digital photography. They had the technology and the patents to do it…yet dipstick didn’t do it! Assets (likemland and buildings) were sold off for a fraction of their value…and the guy could have borrowed agaianst the assets…but he preferred to sell them off.
then it was the ID badge fiasco:Polaroid was informed by the MA state RMV that they were looking to replace the polaroid-based ID badges…that was years ago…what did dipstick CEO do? he ignored it!
This bum was paid a substantial salary, and screwed the company…he should have recived NOTHING!
One could make a case that other employees share some blame for not setting up enough checks and balances to prevent such an act from occuring…
That’s great information - thanks, Cal!
I don’t know much about the Polaroid situation itself, so much of the above that I posted was based upon general observations, not upon this specific case.
However, sounds like from your description that Polaroid had a difficult time moving products from the realm of ideas (patents) to actual products, and those that they actually did make they missed the larger market. That’s not uncommon, but what is rare is that Polaroid was a consumer-product oriented company who had that ability, and they apparently forgot that fact.
And that is an executive issue. From your description, it sounds as if one (or a couple) of people whom the company overly relied on retired, and their successors weren’t of the same orientation that made Polaroid a success in the first place. And while this might roil some people who used to work for Polaroid, generally succession problems such as this are the fault of the founder or a long-time CEO.
Succession is likely the biggest problem that all successful companies have to overcome. While there are exceptions (Bill Gates is an obvious one (I’m pretty sure - time will tell), Thomas Edison is another), people who invent or are entreprenuers, really aren’t oriented to deal the bureaucratic glurge that is necessary to keep a company running for the extra-long term, long beyond their deaths. They personalize themselves too much with the company, they surround themselves with yes-men, they do (and think) all sorts of things that make the company too dependent upon the founder (and many times all at once!)
So, I don’t know, but I’m pretty sure that you can trace Polaroids rot back through to Edwin Land and the very people he groomed to replace him. They lost their vision (floppy disk manufacture? Software duplication services?) and couldn’t gain it back.
Land retired as President in 1975, staying on as CEO until 1980 and as Chairman of the Board in 1982. His successor, William McCune was Pres/CEO/Chairman in 1975/1980/1982 and stayed until 1985/1985/1991 respectively.) His successor held those positions from 1985/1985/1991 to 1995 (all positions), when he was replaced by company outsider Gary DiCamillo. In case anybody is interested.
Are you talking about the Barings Bank case? IIRC, the person in question, a bond trader named Nick Leeson, deceived his employers about his positions, even to the point of keeping two books - the real book and the one he would show his bosses.
But wasn’t he basically running the show in his location? Nobody reviewed his numbers or his transactions. You can only cook the books so much. Though Ewan MacGreggor did make me feel bad for him…